EV discounts bite margins
Automakers are discounting electric vehicles by roughly 15% off transaction price and are effectively eating about $8,000 per EV sale to move inventory amid tightening demand. (carscoops.com) The broader pricing picture still stings consumers — the average new‑car price is now near $50,000, up about 30% over six years. (fortune.com)
Electric vehicle buyers are getting bigger discounts, but carmakers are paying for them with margins. In March, the average electric vehicle sold for $54,508, down 2.8% from a year earlier, while discounts averaged 14.6% of the transaction price, or roughly $8,000 per vehicle, according to Cox Automotive data cited by Carscoops. The average new vehicle across the industry sold for $49,275. The gap between the average electric vehicle and the average new vehicle has narrowed to about $5,200 to $5,800, depending on the comparison used in recent reports, after three straight monthly declines in electric vehicle prices. Industrywide incentives rose to 7.2% of transaction price in March, up from 6.9% in February. The price cuts are landing in a market where demand has cooled since federal clean vehicle tax credits ended for vehicles acquired after September 30, 2025. J.D. Power said electric vehicles were expected to make up just 6.6% of retail sales in February 2026, down 1.8 percentage points from a year earlier. Buyers are still facing a market built around expensive vehicles. Cox Automotive said the average manufacturer’s suggested retail price was $51,456 in March, the 12th straight month above $50,000, while full-size pickups averaged $65,964 and midsize sport utility vehicles averaged $49,853. That squeeze shows up in household budgets. Associated Press reporting said new vehicles now sell for nearly $50,000 on average, up 30% in six years, and a typical monthly payment based on 10% down and a six-year loan recently hit $775. Cheap new cars are disappearing from dealer lots. The share of vehicles listed for less than $30,000 has fallen to about 13%, down from 40% five years ago, according to CarGurus data cited by the Associated Press. Some shoppers are stretching loans to cope. J.D. Power said 12.7% of financed sales in February used 84-month terms, up from 7.7% a year earlier, and the average monthly finance payment reached $811. Automakers have not solved the affordability problem so much as shifted it. Electric vehicles are getting closer to gasoline models on sticker and transaction price, but the industry is still relying on heavier discounts to move them while the average new vehicle remains near record highs.
